PERTH (miningweekly.com) – Iron-ore miner BC Iron on Tuesday downwardly revised its 2015 sales targets as it struggled to break even, following a tough September quarter.
BC told shareholders this week that its Nullagine joint venture (JV), in Western Australia, was slowed during the quarter as the company implemented a number of mining and crushing and screening initiatives to address higher clay content.
As expected, production during the quarter was affected, with the Nullagine mine shipping only 950 000 t, compared with the 1.4-million tonnes shipped in the previous quarter.
“The issues experienced at the Nullagine JV during the quarter had a short-term impact on production and costs, and resulted in the JV being three-and-a-half shipments below the forecast for the quarter,” said BC MD Morgan Ball.
As a result of the declining production, BC on Tuesday revised its 2015 sales guidance from the original 5.8-million to 6.2-million tonnes, to between 5.2-million and 5.6-million tonnes, while C1 operating costs for the full year were expected to be between A$55/t and A$59/t, as opposed to the A$49/t and A$53/t previously projected.
Furthermore, BC was now expecting total cash costs for the year to be between A$64/t and A$70/t, with the miner on Tuesday reporting that average realised prices of only $72/t had been achieved during the quarter under review.
Ball told shareholders that the company had worked through the operational matters at Nullagine and was ramping-up to a six-million-tonne-a-year run-rate, which was expected from November onwards.
“Our focus is on returning the JV production to a six-million-tonne-a-year run-rate for the remainder of the financial year, and to operate within the previous C1 cash cost guidance range of A$49/t to A$53/t over that period.”
The company would also work to catch up on missed shipments, but Ball said that this was largely dependent on a favourable wet season.
“Despite the challenging quarter, we remain in a solid balance sheet, with BC Iron cash of A$92-million, ensuring we are well placed to manage the business during this period of softer Australian dollar iron-ore prices.”